If you think the proposed Quality of Advice Review changes will alone fix your efficiency woes, then it’s time to think again.
Now, don’t get me wrong. I am completely in favour of simplifying advice documents and introducing common sense regulation as suggested by Minister for Financial Services Stephen Jones. But sensible regulatory change is only part of the solution, not the solution itself.
Advisers must still proactively implement the right combination of software, systems, and processes to drive efficiency gains in their practice– regardless of whether QAR is implemented and in whatever form it takes. Allow me to explain how and why.
No silver bullet
In my current role, I work with leading practices across Australia and the number one pain point felt across the board is the time required to produce advice.
Any regulatory reform that can help remove friction in the advice process would be welcome. But regulatory reform in isolation, will not, make this problem disappear.
Let’s take, for example, the recommendation to overhaul overly lengthy advice documents. Few would dispute that much of the content routinely included in the “current form” Statement of Advice goes overboard.
But that addresses just one part of the process – the SOA itself. There are many other steps involved in providing high quality advice, such as fact finding, scoping, modelling, goal analysis and product selection that each contribute to the time and cost of the process. Advice will still need to be documented.
Plus, there is, of course, the time spent on client reviews – the area of practice that takes the most time for most firms.
The point is, without the right software, processes and systems, the advice process will continue to be inefficient.
So, what can firms proactively do right now to improve productivity and position themselves for success in a post QAR environment?
Use a client portal
Firms who use a digital portal to capture client data before a meeting can save up to two hours per client. That, step, alone represents a massive productivity gain. A portal is not only efficient, but more secure.
Will clients, particularly older clients, be happy to use a portal? In a recent podcast I did with Caboodle Financial Services financial adviser Peita Diamantidis, we both agreed that the test was whether a client could use a smart phone. If so, they will certainly be tech savvy enough to engage with a portal.
Bring modelling into your meetings
If the door is opened to ‘big super’ providing advice, then fee-for-service advisers will need to strongly differentiate their service offering.
A renewed focus on the client’s ‘bigger picture’ – using strategy and interactive tools, to showcase different strategies and outcomes will empower clients to make better financial decisions.
Should we fly business class or economy, send our children to private or public schools, salary sacrifice or pay off the mortgage? These are the questions that matter to clients, and technology can better facilitate these more meaningful conversations.
Test your adaptability
It was evolutionary biologist Charles Darwin who famously said that it’s not the strongest of the species that survives, but the one most adaptable to change. Now is a perfect time to test how quickly your systems can adapt to a new environment.
Speaking, at our recent Practice Leaders Forum in Sydney, certified financial planner Michael Chalmers said that his practice would be “ready in three days” if QAR came into effect. With a multi-office practice, and staff and clients located around rural Victoria, that’s quite a statement.
But, according to him, they have flexible templates and reports, that can easily be adapted to suit the needs of their clients if SOAs go out the door.
Asked if he saw ‘big super’ as a threat to current business models, he said that he didn’t see it that way. “There are many consumers who are priced out of the market and this may serve as a useful entry point for them to access more basic advice.”
Vincent Holland is a co-founder of Plutosoft, a comprehensive financial planning software platform for financial planners.
